Correlation Between Neinor Homes and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and Summit Hotel at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Neinor Homes and Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and Summit Hotel Properties, you can compare the effects of market volatilities on Neinor Homes and Summit Hotel and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Neinor Homes with a short position of Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and Summit Hotel.
Diversification Opportunities for Neinor Homes and Summit Hotel
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Neinor and Summit is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties and Neinor Homes is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Neinor Homes SA are associated (or correlated) with Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Neinor Homes i.e., Neinor Homes and Summit Hotel go up and down completely randomly.
Pair Corralation between Neinor Homes and Summit Hotel
Assuming the 90 days trading horizon Neinor Homes SA is expected to generate 0.78 times more return on investment than Summit Hotel. However, Neinor Homes SA is 1.28 times less risky than Summit Hotel. It trades about 0.19 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.08 per unit of risk. If you would invest 1,153 in Neinor Homes SA on November 3, 2024 and sell it today you would earn a total of 521.00 from holding Neinor Homes SA or generate 45.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neinor Homes SA vs. Summit Hotel Properties
Performance |
| Timeline |
| Neinor Homes SA |
| Summit Hotel Properties |
Neinor Homes and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and Summit Hotel
The main advantage of trading using opposite Neinor Homes and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, Summit Hotel can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Summit Hotel will offset losses from the drop in Summit Hotel's long position.| Neinor Homes vs. Fukuyama Transporting Co | Neinor Homes vs. SQUIRREL MEDIA SA | Neinor Homes vs. COLUMBIA SPORTSWEAR | Neinor Homes vs. PENN Entertainment |
| Summit Hotel vs. Host Hotels Resorts | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Park Hotels Resorts | Summit Hotel vs. Pebblebrook Hotel Trust |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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